BEIJING - Growing unease
is beginning to show from behind the facade of celestial calm that President
Jiang Zemin and China's collective leadership like to project to the outside
world.

China is facing numerous threats. First, the growing
worry in Beijing that the Bush administration has decided to adopt a more
confrontational policy toward China. The recent leaking of U.S. plans to
use nuclear weapons in the event of a major clash over Taiwan and/or North
Korea, as well as President George Bush's extraordinary reckless and dangerous
"axis of evil speech," caused great consternation across Asia,
especially in Beijing.

A recently concluded naval entente between the U.S. and
India is seen in Beijing as a further move by Washington to strategically
isolate China and threaten its maritime interests. India is now acquiring
state-of-the-art naval technology from Russia, including, likely, an aircraft
carrier, two nuclear submarines, long-range maritime bombers and powerful
anti-ship cruise missiles that have only two possible uses: either against
China, or against the U.S. Pacific Fleet. The U.S. has been winking at
Israel's sale of advanced nuclear technology, conventional weapons, and
electronic technology to India, while blasting China for providing limited
military help to Pakistan and Iran.

This column recently learned the CIA has increased monitoring
and agent activities in the northern frontier regions of Laos and Burma,
both of which are considered important military areas by China. Recent
threats by the Bush administration against North Korea are taken by China
as a potential threat to its northern borders. Thanks to the "axis
of evil" speech, reconciliation between the two Koreas has been derailed,
at least for now, much to Seoul's anger and embarrassment.

SENSITIVE BORDER REGION

On top of all this, the government in Beijing is increasingly
concerned by the establishment of a constellation of permanent U.S. military
bases in neighbouring Pakistan, Afghanistan and Central Asia - right next
to China's most sensitive western border region, Sinkiang, the centre of
China's nuclear program and where there is unrest among ethnic Muslim Uighers.
Just to the south lies another strategic western province, Tibet. The last
time U.S. military forces came too close to China's border - during the
Korean war - Beijing sent 500,000 troops to drive American forces back
from the Yalu River.

Though China's leadership will not say so publicly, in
private fears are being expressed that the Bush administration is becoming
increasingly bellicose. Some critics say even borderline irrational. Bush's
war talk and mammoth increase in defence spending have convinced many here
that somehow those old Cold War demons - the "Pentagon military-industrial
revanchist, imperialist ruling circles" as the communists used to
say, have risen from the grave.

The current bloody Mideast crisis is also unnerving Asian
governments, many of them friends of the U.S.: there is widespread incomprehension
at how the world's sole superpower appears to be led around by its appendage,
Israel, and unable to even impose minimal UN resolutions on Ariel Sharon's
government while threatening to invade Iraq for defying UN resolutions.
Bush's comatose, feeble, finger-waving response to the Mideast crisis has
left Asians wondering about the focus, priorities, and mindset of the White
House. Making matters worse, Bush - who calls himself a free trader - recently
imposed steel tariffs that caused a storm of anger in China and South Korea.

In contrast to Washington's swaggering assertiveness,
China's cautious leaders have focused on building good trade relations
with the U.S., and attracting more badly needed foreign investment. The
anniversary of the nasty fracas last year caused by the collision of a
prying U.S. military aircraft and a Chinese fighter was ignored by China's
state media, a sure sign Beijing wants to keep relations on an even keel.
The only exception to China's benign behaviour has been the occasional
threat towards Taiwan backed by choreographed movements of military forces.

China is not ready for any foreign confrontations. Its
entry into the World Trade Organization threatens the livelihood of 850
million inefficient farmers who can't compete with grains from the U.S.,
Canada and Australia. Some 200 million more workers may soon be laid off
by dying state industries that are due for closure. China's big four banks
are wobbling dangerously. In short, China is performing the last and most
perilous part of its high wire trapeze leap from socialism to the free
market. Much could yet go wrong.

There is also growing worry here that the Bush administration's
super hawks will try to take advantage of China's self-absorption and internal
economic problems to advance U.S. interests in the Western Pacific and
Central Asia. Hardliners are raising alarms about U.S. intentions, claiming
once again that Washington is surrounding China with hostile forces. Beijing
is convinced Bush's proposed anti-missile defence shield is aimed directly
at neutralizing China's small force of elderly ICBMs. As a result, China
has been forced to speed up its program to develop modern, mobile ICBMs,
possibly with multiple warheads.

China, as always in its long history, would prefer to
mind its own business. But the outside world may just not let the Middle
Kingdom alone.